Staff Leasing Reports First Quarter Results

BRADENTON, Fla., April 26 /PRNewswire/ --
Staff Leasing, Inc. (Nasdaq: STFF), a leading human resource solutions
provider, announced today its financial results for the first quarter ended
March 31, 2001.
Revenues increased in the first quarter by 2.9% to $752.3 million from
$731.3 million in the first quarter of 2000. Revenue increased despite a
decline in the average paid worksite employees from 115,046 to 106,821, or
7.1%.
Gross profit for the first quarter of 2001 increased 1.3% to $23.7 million
from $23.4 million in the first quarter of 2000. As a percentage of revenue,
gross profit remained flat at 3.2% during the comparable quarter in 2000. The
average annualized gross profit per paid worksite employee increased 8.8% from
$814 in the first quarter of 2000 to $886 in the first quarter of 2001.
The Company reported net income for the first quarter of 2001 of $.4
million or $.02 per share (diluted) excluding a one time after tax charge
related to severance expenses of $.3 million.
Michael K. Phippen, Chairman and Chief Executive Officer of Staff Leasing,
remarked: "In the first quarter, we continued to strive towards our three
major goals of targeting the white and gray collar businesses, investing in
and developing new products and services, and improving the efficiencies and
effectiveness of our operations."
The company continued to make progress in moving its business towards more
white and gray collar as evidenced by the 16.3% decline in workers'
compensation billed mix from $5.70 for the first quarter of 2000 to $4.77 in
the first quarter of 2001. The workers' compensation claims frequency
declined more than the decline in the billed mix. Average wages per paid
worksite employee were up 11.0% during this same period.
Staff Leasing is preparing to go live in the second quarter of this year
with its first clients using the small business unbundled products as a result
of the Oracle Partnership. The enterprise unbundled solutions for larger
clients are tracking towards a third quarter of 2001 go-live date.
The Company's total overall operating expense has declined from
$25.0 million to $24.3 million excluding the severance charges during the
quarter of $.5 million. The annualized operating expense per paid worksite
employee increased 5.2%, from $794 to $835 excluding the severance charges of
$18 per paid worksite employee. The Company continues to balance operating
cost reductions with added expenses related to additional sales growth. These
growth initiatives include national expansion, increased marketing efforts,
unbundled new products and services, and delivery of a higher level PEO
service offering.
The Company ended the quarter with $91.2 million of cash, cash equivalents
and marketable securities, a decrease from December 31, 2000 of $5.8 million.
The decrease in cash is primarily due to a reduction in workers' compensation
reserves of $3.7 million. The reserve declined to $26.3 million at March 31,
2001 compared to $30.0 million at December 31, 2000. During the quarter the
Company repurchased the remaining 38,000 shares of stock for $.1 million to
finish the previously authorized share repurchase program. Staff Leasing also
announced a planned regular quarterly dividend of $.05 per share payable on
April 30, 2001 to shareholders of record as of April 16, 2001.
"Our infrastructure is in place and ready to take on additional business
volume as the Company and the sales force make the business model transition,"
commented Chief Financial Officer, John E. Panning. "Significant incremental
revenue can be added with very little operating infrastructure growth."
As it relates to the PEO business the Company expects to see the number of
worksite employees remain relatively flat from the first to the second
quarter, with growth starting in the third quarter. Staff Leasing anticipates
revenues to be relatively flat for the remainder of 2001 as compared to last
year.
Staff Leasing is a leading human resource solutions provider in the United
States, providing customers with a broad range of employee management
services, including human resources consulting, recruiting, training, payroll
administration, benefits administration, unemployment services and risk
management. Staff Leasing has 39 offices in Alabama, Arizona, Colorado,
Florida, Georgia, Minnesota, North Carolina, Tennessee and Texas. Staff
Leasing ranks number 508 on the Fortune 1000 list based on total revenues of
$3.1 billion in 2000. The Company is also number 189 on the InformationWeek
500 list of leading information technology innovators. Staff Insurance, Inc.,
a wholly owned subsidiary of Staff Leasing, provides a full range of corporate
insurance products, including general liability and commercial auto.
Staff Leasing's core services are complemented by an eCommerce strategy
that includes STAFFweb, an eService platform that provides clients and
worksite employees with information and resources to help maximize the benefit
of their Staff Leasing services.
The Company will discuss first quarter 2001 results during a live
conference call at 10:30 a.m. ET on April 26, 2001. To participate in the
call, dial 888-328-2935 and ask for the Staff Leasing conference call. Allow
five to ten minutes before 10:30 a.m. Eastern time to secure the line. To
listen to the call via the Web, log on at
http://www.videonewswire.com/STFF/042601/. Allow five to ten minutes before
10:30 a.m. Eastern time to register. Minimum requirements to listen to the
broadcast include (1) RealPlayer software which is downloadable free at
www.real.com/products/player/index.html, and (2) at least a 28.8Kbps
connection to the Internet. If you are unable to listen to the live call,
audio will be archived on the Staff Leasing website at www.staff-leasing.com.
To access the replay, click on http://www.videonewswire.com/STFF/042601/.
Approximately one week after the call, a transcript of this conference will
also be available on the Company's website.
NOTE: Statements in this press release relating to matters that are not
historical facts are forward-looking statements. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results or performance of Staff Leasing, Inc. to be
materially different from any future results or performance expressed or
implied by such forward-looking statements. Such known and unknown risks,
uncertainties and other factors include, but are not limited to, the
following: (i) the potential for additional subsidies of health benefit plans;
(ii) volatility in workers' compensation rates and unemployment taxes; (iii)
possible adverse application of certain federal and state laws and the
possible enactment of unfavorable laws or regulation; (iv) impact of
competition from existing and new professional employer organizations; (v)
risks associated with expansion into additional states where the Company does
not have a presence or significant market penetration; (vi) risks associated
with the Company's dependence on key vendors; (vii) the possibility for client
attrition; (viii) risks associated with geographic market concentration and
concentration of clients in the construction industry; (ix) the financial
condition of clients; (x) the failure to properly manage growth and
successfully integrate acquired companies and operations; and (xi) other
factors which are described in further detail in the Company's filings with
the Securities and Exchange Commission.
A copy of this press release can be found on the Company's website at
www.staff-leasing.com.
STAFF LEASING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months
Ended March 31
2000 2001
(in thousands,
except per share data)
(unaudited)
Revenues $731,315 $752,298
Cost of services:
Salaries, wages and payroll taxes 663,710 684,179
Benefits, workers' compensation,
state unemployment taxes and other costs 44,199 44,463
Total cost of services 707,909 728,642
Gross profit 23,406 23,656
Operating expenses:
Salaries, wages and commissions 15,392 16,038
Other general and administrative 7,435 6,729
Depreciation and amortization 2,221 2,062
Total operating expenses 25,048 24,829
Operating loss (1,642) (1,173)
Interest income, net 956 1,090
Other non-operating expense (127) (4)
Loss before income taxes (813) (87)
Income tax benefit (305) (181)
Net income (loss) $(508) $ 94
Net income (loss) per share
- Basic $(.02) $ .00
- Diluted $(.02) $ .00
Weighted average shares outstanding
- Basic 21,707 20,641
- Diluted 21,708 20,644
STAFF LEASING, INC. AND SUBSIDIARIES
SELECTED BALANCE SHEET ITEMS
(in thousands)
As of As of
Dec. 31, 2000 March 31, 2001
(audited) (unaudited)
Cash and cash equivalents,
certificates of deposit -
restricted and marketable securities $96,968 $91,152
Accounts receivable from
unbilled revenues 62,776 59,802
Accounts receivable
(billed, net of allowance for
doubtful accounts) 8,567 4,134
Property and equipment, net 25,040 24,459
Total assets 212,338 198,737
Accrued workers' compensation
insurance premium - Short - term 10,488 6,787
Accrued workers' compensation
insurance premium - Long - term 19,530 19,530
Total liabilities 134,878 121,307
Debt --- ---
Shareholders' equity 77,460 77,430
STAFF LEASING, INC. AND SUBSIDIARIES
STATISTICAL DATA
1st Quarter 2000 1st Quarter 2001 Percentage
Change
Active worksite
employees at period end 132,916 114,769 -13.7%
Clients at period end 10,395 8,515 -18.1%
Worksite employees/
clients at period end 12.8 13.5 5.5%
Average number of
employees paid by month 115,046 106,821 -7.1%
Annualized average
wage per paid employee $21,337 $23,684 11.0%
Workers' Compensation
billing per hundred
dollars of total wage $5.70 $4.77 -16.3%
Annualized total gross
profit per paid employee $814 $886 8.8%
Annualized operating
expense excluding
depreciation and
amortization per
paid employee $794 $853 7.4%
Annualized depreciation
and amortization
per paid employee $77 $77 0%
Annualized operating loss
per paid employee ($57) ($44) -22.8%
MAKE YOUR OPINION COUNT - Click Here
http://tbutton.prnewswire.com/prn/11690X31828501

SOURCE Staff Leasing, Inc.

BRADENTON, Fla., April 26 /PRNewswire/ --
Staff Leasing, Inc. (Nasdaq: STFF), a leading human resource solutions
provider, announced today its financial results for the first quarter ended
March 31, 2001.
Revenues increased in the first quarter by 2.9% to $752.3 million from
$731.3 million in the first quarter of 2000. Revenue increased despite a
decline in the average paid worksite employees from 115,046 to 106,821, or
7.1%.
Gross profit for the first quarter of 2001 increased 1.3% to $23.7 million
from $23.4 million in the first quarter of 2000. As a percentage of revenue,
gross profit remained flat at 3.2% during the comparable quarter in 2000. The
average annualized gross profit per paid worksite employee increased 8.8% from
$814 in the first quarter of 2000 to $886 in the first quarter of 2001.
The Company reported net income for the first quarter of 2001 of $.4
million or $.02 per share (diluted) excluding a one time after tax charge
related to severance expenses of $.3 million.
Michael K. Phippen, Chairman and Chief Executive Officer of Staff Leasing,
remarked: "In the first quarter, we continued to strive towards our three
major goals of targeting the white and gray collar businesses, investing in
and developing new products and services, and improving the efficiencies and
effectiveness of our operations."
The company continued to make progress in moving its business towards more
white and gray collar as evidenced by the 16.3% decline in workers'
compensation billed mix from $5.70 for the first quarter of 2000 to $4.77 in
the first quarter of 2001. The workers' compensation claims frequency
declined more than the decline in the billed mix. Average wages per paid
worksite employee were up 11.0% during this same period.
Staff Leasing is preparing to go live in the second quarter of this year
with its first clients using the small business unbundled products as a result
of the Oracle Partnership. The enterprise unbundled solutions for larger
clients are tracking towards a third quarter of 2001 go-live date.
The Company's total overall operating expense has declined from
$25.0 million to $24.3 million excluding the severance charges during the
quarter of $.5 million. The annualized operating expense per paid worksite
employee increased 5.2%, from $794 to $835 excluding the severance charges of
$18 per paid worksite employee. The Company continues to balance operating
cost reductions with added expenses related to additional sales growth. These
growth initiatives include national expansion, increased marketing efforts,
unbundled new products and services, and delivery of a higher level PEO
service offering.
The Company ended the quarter with $91.2 million of cash, cash equivalents
and marketable securities, a decrease from December 31, 2000 of $5.8 million.
The decrease in cash is primarily due to a reduction in workers' compensation
reserves of $3.7 million. The reserve declined to $26.3 million at March 31,
2001 compared to $30.0 million at December 31, 2000. During the quarter the
Company repurchased the remaining 38,000 shares of stock for $.1 million to
finish the previously authorized share repurchase program. Staff Leasing also
announced a planned regular quarterly dividend of $.05 per share payable on
April 30, 2001 to shareholders of record as of April 16, 2001.
"Our infrastructure is in place and ready to take on additional business
volume as the Company and the sales force make the business model transition,"
commented Chief Financial Officer, John E. Panning. "Significant incremental
revenue can be added with very little operating infrastructure growth."
As it relates to the PEO business the Company expects to see the number of
worksite employees remain relatively flat from the first to the second
quarter, with growth starting in the third quarter. Staff Leasing anticipates
revenues to be relatively flat for the remainder of 2001 as compared to last
year.
Staff Leasing is a leading human resource solutions provider in the United
States, providing customers with a broad range of employee management
services, including human resources consulting, recruiting, training, payroll
administration, benefits administration, unemployment services and risk
management. Staff Leasing has 39 offices in Alabama, Arizona, Colorado,
Florida, Georgia, Minnesota, North Carolina, Tennessee and Texas. Staff
Leasing ranks number 508 on the Fortune 1000 list based on total revenues of
$3.1 billion in 2000. The Company is also number 189 on the InformationWeek
500 list of leading information technology innovators. Staff Insurance, Inc.,
a wholly owned subsidiary of Staff Leasing, provides a full range of corporate
insurance products, including general liability and commercial auto.
Staff Leasing's core services are complemented by an eCommerce strategy
that includes STAFFweb, an eService platform that provides clients and
worksite employees with information and resources to help maximize the benefit
of their Staff Leasing services.
The Company will discuss first quarter 2001 results during a live
conference call at 10:30 a.m. ET on April 26, 2001. To participate in the
call, dial 888-328-2935 and ask for the Staff Leasing conference call. Allow
five to ten minutes before 10:30 a.m. Eastern time to secure the line. To
listen to the call via the Web, log on at
http://www.videonewswire.com/STFF/042601/. Allow five to ten minutes before
10:30 a.m. Eastern time to register. Minimum requirements to listen to the
broadcast include (1) RealPlayer software which is downloadable free at
www.real.com/products/player/index.html, and (2) at least a 28.8Kbps
connection to the Internet. If you are unable to listen to the live call,
audio will be archived on the Staff Leasing website at www.staff-leasing.com.
To access the replay, click on http://www.videonewswire.com/STFF/042601/.
Approximately one week after the call, a transcript of this conference will
also be available on the Company's website.
NOTE: Statements in this press release relating to matters that are not
historical facts are forward-looking statements. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results or performance of Staff Leasing, Inc. to be
materially different from any future results or performance expressed or
implied by such forward-looking statements. Such known and unknown risks,
uncertainties and other factors include, but are not limited to, the
following: (i) the potential for additional subsidies of health benefit plans;
(ii) volatility in workers' compensation rates and unemployment taxes; (iii)
possible adverse application of certain federal and state laws and the
possible enactment of unfavorable laws or regulation; (iv) impact of
competition from existing and new professional employer organizations; (v)
risks associated with expansion into additional states where the Company does
not have a presence or significant market penetration; (vi) risks associated
with the Company's dependence on key vendors; (vii) the possibility for client
attrition; (viii) risks associated with geographic market concentration and
concentration of clients in the construction industry; (ix) the financial
condition of clients; (x) the failure to properly manage growth and
successfully integrate acquired companies and operations; and (xi) other
factors which are described in further detail in the Company's filings with
the Securities and Exchange Commission.
A copy of this press release can be found on the Company's website at
www.staff-leasing.com.
STAFF LEASING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months
Ended March 31
2000 2001
(in thousands,
except per share data)
(unaudited)
Revenues $731,315 $752,298
Cost of services:
Salaries, wages and payroll taxes 663,710 684,179
Benefits, workers' compensation,
state unemployment taxes and other costs 44,199 44,463
Total cost of services 707,909 728,642
Gross profit 23,406 23,656
Operating expenses:
Salaries, wages and commissions 15,392 16,038
Other general and administrative 7,435 6,729
Depreciation and amortization 2,221 2,062
Total operating expenses 25,048 24,829
Operating loss (1,642) (1,173)
Interest income, net 956 1,090
Other non-operating expense (127) (4)
Loss before income taxes (813) (87)
Income tax benefit (305) (181)
Net income (loss) $(508) $ 94
Net income (loss) per share
- Basic $(.02) $ .00
- Diluted $(.02) $ .00
Weighted average shares outstanding
- Basic 21,707 20,641
- Diluted 21,708 20,644
STAFF LEASING, INC. AND SUBSIDIARIES
SELECTED BALANCE SHEET ITEMS
(in thousands)
As of As of
Dec. 31, 2000 March 31, 2001
(audited) (unaudited)
Cash and cash equivalents,
certificates of deposit -
restricted and marketable securities $96,968 $91,152
Accounts receivable from
unbilled revenues 62,776 59,802
Accounts receivable
(billed, net of allowance for
doubtful accounts) 8,567 4,134
Property and equipment, net 25,040 24,459
Total assets 212,338 198,737
Accrued workers' compensation
insurance premium - Short - term 10,488 6,787
Accrued workers' compensation
insurance premium - Long - term 19,530 19,530
Total liabilities 134,878 121,307
Debt --- ---
Shareholders' equity 77,460 77,430
STAFF LEASING, INC. AND SUBSIDIARIES
STATISTICAL DATA
1st Quarter 2000 1st Quarter 2001 Percentage
Change
Active worksite
employees at period end 132,916 114,769 -13.7%
Clients at period end 10,395 8,515 -18.1%
Worksite employees/
clients at period end 12.8 13.5 5.5%
Average number of
employees paid by month 115,046 106,821 -7.1%
Annualized average
wage per paid employee $21,337 $23,684 11.0%
Workers' Compensation
billing per hundred
dollars of total wage $5.70 $4.77 -16.3%
Annualized total gross
profit per paid employee $814 $886 8.8%
Annualized operating
expense excluding
depreciation and
amortization per
paid employee $794 $853 7.4%
Annualized depreciation
and amortization
per paid employee $77 $77 0%
Annualized operating loss
per paid employee ($57) ($44) -22.8%
MAKE YOUR OPINION COUNT - Click Here
http://tbutton.prnewswire.com/prn/11690X31828501
SOURCE Staff Leasing, Inc.